This study documents and analyzes retrenchment patterns in American cities. To explain variations in such patterns we will analyze the processes involved in reaching and implementing decisions to curtail municipal expenditures. The main focus is on the roles of citizens, organized groups, and political leaders as key actors in these decisions. The study should provide more adequate input to future policy making. Three types of data will be used: (1) existing data on 62 cities that cover past decision-making patterns and fiscal trends; (2) new survey data on recent municipal budgetary decisions and key local participants in such decisions; and (3) case studies of selected cities to provide more detailed information on how local decision-making can result in cutbacks. To explain variations in retrenchment our full model includes six types of variables, derived from the three data sources. These variables are local resources such as sales value of taxable property; local citizen preferences based on the socio-economic characteristics of the population and surveys; political activity of organized groups and preferences of local leaders, both derived from survey data; and municipal fiscal data from Census and survey data.